GameStop adds online shopping, rewards to its brick-and-mortar stores

Fearing that video game stores will go the way of Hollywood Video and Blockbuster, the head honchos of GameStop transformed their newest brick-and-mortar location into a sort of online games and packaged goods hybrid.

This “store of the future,” located in Palo Alto, California, has downloadble and Flash-based games on a web-connected PC as well as rewards program kiosks, large displays for watching demos, and other sorts of technology. Twice the size of your typical GameStop, the store also has a large section devoted to trading games, a business model that amounts to 31 percent of the chain’s sales.

The kiosks, pictured below, work using a PowerUp Rewards Pro Card. When you insert your card, your name, your wishlist, and the games you’ve bought will pop up on the screen. You can add games to your wishlist by scanning the barcode of a game from the store’s shelves. The more you spend, the more rewards and achievements you receive. You can also purchase DLC by browsing, swiping your credit card, and receiving a redeemable code to take home. While the content costs the same as it would if you bought it from your own sofa, you obtain reward points by purchasing the content from a GameStop kiosk.

In addition to opening more and more stores in key locations, GameStop has bought an indie online game portal, Kongregate, as well as Jolt Online Gaming, a maker of free-to-play online games. Chief Executive J. Paul Raines said physical GameStop stores serve more than 500 million visitors a year. However, thanks to Kongregate, GameStop now has another 10 million visitors to add to its already-popular website.

While GameStop used to only monetize roughly 1 percent of its online traffic, sites like Kongregate and other efforts to monetize will help convert more of that traffic into loyal, paying customers, according to Chris Petrovic, the general manager of GameStop Digital Ventures. GameStop plans to invest $100 million a year in the online portion of its business.